Around 4,000 jobs have been saved at Tata Steel's Scunthorpe plant after it reached an agreement to sell the plant to a City investment firm.
Greybull Capital says it is organising a £400 million investment package for the Long Products Europe business, which includes the Scunthorpe plant.
Workers have been asked to take a 3% pay cut and reductions to their pensions contributions. Tata already announced 1,200 job cuts, and while these will still place, Greybull Capital said it is not likely to cut any more.
The Greybull Capital said it was "delighted" to agree a deal, with the takeover expected to be completed in around eight weeks.
Long Products Europe, which also has two mills in Teeside, a mill in France, a design consultancy in York and an engineering workshop in Workington, will be rebranded to "British Steel". The business focuses on making steel for the UK's rail and construction sectors.
The two have been in negotiations for around nine months. Tata put the business on the market in 2014 - long before it decided to sell the rest of its business in the UK.
Selling the rest of the business
The agreement comes as Tata Steel formally launches the sale process of its other UK businesses, including the Port Talbot steel plant, inviting interested parties to make official bids.
Although it is understood that more parties are interested, the only one to publicly reveal their attraction to Tata's UK business is Sanjeev Gupta, owner of commodities firm Liberty House. He has spoken frequently in the media about the possibility of buying the loss-making plants without making significant redundancies.
Speaking to the Sunday Telegraph, Mr Gupta said: "[There is] a very clear opportunity to turn things around, make money and create a sustainable business."
He added: "I feel passionately about this and would like to do it, but I am not married to it.
"It is too big a deal for us to get wrong. It could put the whole company at risk."
With the Port Talbot plant alone losing an estimated £1 million a day, Tata Steel is known to want to find a buyer quickly, or close the plant until a buyer can be found. But following meetings with Tata's chairman in India last week, business secretary Sajid Javid assured workers that Tata would be a "responsible seller".